Suppose that inventories are falling. We could expect that, in the future:
A) Unemployment will likely increase
B) Unemployment will likely decrease
C) We can't predict what will happen to unemployment
D) Real GDP will likely decrease

Question

Quizplus · Accepted Answer

When inventories are falling, it indicates that demand for goods is exceeding supply. This can lead to an increase in production and ultimately lead to firms hiring more workers to meet this demand. As a result, unemployment is likely to decrease.

Suppose That Inventories Are Falling